When China’s Communist leaders under Deng Xiaoping launched their assault on the Tiananmen Square protesters in 25 years ago, they were supposedly following the socialist road and Marxist principles of proletarian rule. “Workers of all lands, unite!” declared Karl Marx and Friedrich Engels in the1848 Communist Manifesto.

But the vast expansion of the world’s workforce unleashed by Deng following the crackdown on the pro-democracy protesters led to the opposite.The opening up of China through economic reform and foreign direct investment has, instead of uniting the proletariat, divided it.This was not the revolution Marx envisaged but it was the outcome of Deng’s 1992 southern tour, on which the Chinese leader supportedreform in cities such as Shenzhen, trying to strengthen party rule by offering the people opportunity.The fact that few Chinese now markJune 4, 1989 is a tribute both to party censorship and to Deng’s gambit.

It encouraged, as the economist Branko Milanovic has written, “the profoundest global reshuffle of people’s economic positions since the Industrial Revolution.” The top1 per cent earners of the world’s population (especially the 0.1 per cent richest) and millions of new entrants to its industrial workforce have gained in different ways from Deng’s liberalisation.

Meanwhile, the non-bourgeois in advanced economies – manufacturing and service workers with low levels of education and limited skills – have suffered wage stagnation. The ability to bargain for higher wages has been undermined by a huge growth in the global supply of labour – by 1.2bnpeople between 1980 and 2010.Deng did not shake up the world alone.When I was an employment correspondent in the late 1980s and early 1990s, the power of organised labour in the UK had already been weakened by Margaret Thatcher’s privatisation of state-owned industries and her defeat of the 1984-85 miners’ strike. Private sector union membership was falling and it continued to decline.Political and economic upheavalcoincided with the advance of the internet and rapid development of information technology in the mid-1990s. That led to the automation of jobs and more cross-border trade – it became easier for supply chains to stretch around the world.&amp;lt;div class="storyvideonojs"&amp;gt;&amp;lt;div&amp;gt;&amp;lt;p&amp;gt;You need JavaScript active on your browser in order to see this video.&amp;lt;/p&amp;gt;&amp;lt;img alt="No video" src="http://im.ft-static.com/m/img/logo/no_video.gif" /&amp;gt;&amp;lt;/div&amp;gt;&amp;lt;/div&amp;gt;

But China’s rise toppled creaking barriers to trade and employment, forging a global labour market and rapid industrialisation.About 620mpeople globally were lifted from poverty by moving from farm to factory, and China’s gross domestic productper head rose from 3 per cent of the level in advanced economies in 1980 to 20 per cent by 2010, according to the McKinsey Global Institute.

In economic terms, this was good for the Chinese people – although it increased inequality, the gains were broadly spread.For many workers in advanced economies, however, it was like a whole new workforce turning up, eager to put in longer hours for lower pay. Their bargaining power has never recovered from the shock.“For the individual as a consumer, it has been wonderful – there are many more products and services, much more choice, and it has all become cheaper,” says James Manyika, an MGI director. “For workers with limited skills, it is pretty awful. They were once protected, but now they compete with others who are cheaper and may be more skilled.”The strongest effect has been felt in Europe and the US, where the share of income going to labour has decreased from 64 per cent in the postwar decadesup to the 1980s to 58 per centtoday.One Federal Reserve Bank of San Francisco study found that the sharpest drop occurred in industries such as textile manufacture that were most exposed to import competition.

By shifting labour-intensive parts of production to countries such as China and keeping the higher-value aspects at home, companies lowered their costs and raised their returns on capital. For the workers of the world as a whole, that amounted to a wage cut.After a quarter of a century, this arbitrage is easing.Wages in China’s coastal cities have risen, making it more cost-effective to retain production in the US. But that does not guarantee a return to mass employment in manufacturing and primary industries – advances in technology mean factories now employ fewer workers.

People in managerial and high-skilled jobs have gained – the average US college graduate earned1.7 times the wages of a high-school dropout in 1980 but 2.7 times by 2008 – and will continue to have superior employment chances.McKinsey estimates that 95mpeople could be out of work in developing economies by 2020 because they have low skills.Through the lens of history, the best time to be a member of the proletariat in an advanced economy was probably the postwar period up to the oil shock of the mid-1970s – when most of the Chinese and Indian population was poor and agrarian and there was little competition. The era was already ending when China implemented Deng’s plan.

“Today, hundreds of millions of Chinese are living far more comfortable lives than they wereliving in 1989,” writes Ezra Vogel in his Deng biography. Meanwhile, millions of employees in advanced economies are less secure. It is a workers’ revolution, but not a unifying one.

A falling jobless rate could soon change the investment landscape. Will gold just keep falling?

By John Kimelman

June 4, 2014 6:25 p.m. ET

In recent weeks, the financial press has been filled with articles about U.S. economic growth averted, thanks in part to an awful winter which slowed down the country.

And this has led to the reprieve for the bond market because long-term yields have been fallinginstead of rising, as had been expected. It's also led to the belief that the Federal Reserve might maintain its easy-money policies for longer than expected to help the economy. But a compelling story Wednesday by StreetAuthority writer David Sterman points out that this Friday's jobs report, and other upcoming economic events, will jolt markets back to the reality that the economy might not be so bad off. "Quite suddenly, the U.S. economy is shaping up to a look a lot different than when Fed Chairman Janet Yellen took the reins in February," writes Sterman.He quotes a Deutsche Bank report which says that "we expect the labor market to reach its full capacity at leastone yearahead of the Fed's schedule."Sterman writes that the Labor Department is likely to report for the fourth month in a row that at least 200,000 net new jobs were added to the economy. "Yet economists at Deutsche Bank think the forward view is more important," he adds. "They lookedat a series of recent economic data points and then took a fresh look at the current6.3%national unemployment rate. Their conclusion: Based on its current trajectory, the rate should fallsignificantly further over the next year and a half."Along with falling unemployment will come rising inflation, the German bank contends. Other big banks are similarly optimistic about the economy.Citigroup thinks that unemployment will hit6% by the end of this year and dip toward 5.5% by year-end 2015, Sterman writes. For investors, he adds, this all means that "the investing playbook in place since early 2009 is no longer applicable."First, he argues, [long-term] interest rates can start to rise long before the Fed boosts its own rates. The 10-year Treasury note's rate, which is pegged off of economic sentiment and underpins many loan rates such as mortgages, will likely rise over the next six to 12 months. "You should watch how the 10-yearTreasury note responds to Friday's employment report to gauge the bond market's view of economic growth.If rates start to move higher in coming days and weeks, it could signal the start of a longer uptrend, which puts pressure on any yield-producing stocks," he writes. Indeed, if the economy shakes off the bad winter and begins to perform like Wall Street economists have long expected it would, gold may end up being a casualty, writes money manager and financial blogger Barry Ritholtz. In a column for Bloomberg View, Ritholtz states the fivereasons why gold, which peaked in 2011 and has been in bear-market territory since then, will continue to be a bad investment.

Among the forces that will conspire against gold, writes Ritholtz: economic stability, a strong U.S. dollar, tempered geopolitical skirmishes, and finally, no equity crash. "The bottom line seems to be that all of the factors that led to the huge rally in gold from 2001-2011 are no longer present," concludes Ritholtz."The year isn't yet half over and goldstill could stage a comeback. But with each passing day, it looks more and more like the bull market in gold that beganmore than a decade ago is over."I'll close with a reference to a New York Times columnby Park City, Utah-based financial planner Carl Richards. The piece warnsreaders not to forget about market risks even in times when volatility is low and the mood is calm."I'm reminded of Nassim Taleb's story about the turkey in his book, 'The Black Swan,'" Richards writes. "For a turkey, life seems pretty good. Like clockwork, a kind man comes by every day to feed him. But then one day, instead of food, the kind man has an ax. Surprise!"I'm not predicting that we're in for another series of events like in 2009," he writes, referring to the financial collapse. "But I am suggesting that now would be a good time to stick with a disciplined approach to our finances. It means doing simple things like staying diversified and rebalancing, even though it's not cool. It means being conservative in our spending and taking on as little debt as possible. And it means remembering that at some point, risk will return." This sound advice should help keep an investor calm even when the market's calm ends.

The idea thatJean-Claude Junckershould become the next head of the European Commission evokes a strange, irrational rage in the British. I know because I share that rage. There is something about Mr Juncker, a former prime minister of Luxembourg – his smugness, his federalism, his unfunny jokes – that provokes the British.

Yet irrational rage is not a good basis on which to make policy.When I calm down, I wonder whetherit is really worth making such a fuss? After all, the days when the commission president set Europe’s agenda are probably over. During theeuro crisis it became very clear that the key decisions in Europe are now made in Berlin, not Brussels. The current president, José-Manuel Barroso – although a decent man – was reduced to the role of messenger-boy and scapegoat. Mr Juncker could perform both roles admirably. So why make a fuss?

Part of the answer is that the commission president – although not the most important figure in the EU – still carries weight. The job has a certain moral authority. The commission also stillpossesses the “sole right of initiative” to start the EU lawmaking process – so a president Juncker could get the Brussels bureaucracy charging off down some destructive paths.

But the most important reason to block Mr Juncker is the preservation of democracy in Europe. His supporters believe that the democratic arguments are all on their side. They are badly wrong.

The Juncker camp point out that their man was the approved candidate for commission president of the European People’s party – a pan-European grouping, which emerged with the most seats from the recent parliamentary elections. Therefore, they argue, to reject Mr Juncker is to insult European voters.

Matthias Döpfner, chief executive of the Axel Springer media group, argues in the company’s mass-selling Bild that “it is clear that Europeans have chosen Juncker”. Yet this wild assertion was disproved by Mr Döpfner’s own newspaper, which carried an opinion poll, during the election showing that just 7 per cent of German voters even knew that Mr Juncker was the EPP’s candidate.

Behind this dispute lies a clash between two rival visions of democracy in Europe. Oneschool, particularly prominent in Germany, sees enhancing the powers of the European Parliament as the only way to make the EU more democratic. The other school – the one I belong to – believes that increasing the powers of the parliament is actually profoundly damaging to democracy. Many Germans, with their suspicion of anything that smacks of nationalism, find it hard to acknowledge the connection between democracy and the nation.But it is above all in nations – with their shared ties of language, history and political culture – that democracy can live and breathe. At a European level, you can replicate the forms of democracy – elections, political parties and so on – but what you cannot create is the underlying demos (the people) that is needed to bind democracy together. That is why you end up with the absurd situation in which voters are said to have “chosen” a leader they have never heard of.A pan-European democracy is a bad idea for the same reason a world democracy is a bad idea – the political unit is too large to make sense to voters. And before I am accused of a mystical attachment to “the nation”, I should add that not all nations are necessarily the right size to secure democratic assent. The case for Scottish independence rests on the idea that Scotland’s political identity is so different from the rest of the UK that the Scottish nation needs to break free from parliament in Westminster. We will see, in September’s referendum, if most Scots agree – but it is a legitimate question to ask. Supporters of a European federal state often argue that the reason ordinary Europeans do not identify with the parliament is that they are not electing a proper government with real powers. By claiming more powers for the parliament – such as the right to appoint the president of the commission – they hope to attract interest and so conjure a European demos into being.That argument reminds me strongly of the case that was once made for creating the euro. Back then, it was said that evenif EU economies were very different the simple creation of a single currency would force them to converge. Now we are told that, even if there is no common European political identity, transferring powers to the European Parliament will drive the pace of political convergence.In reality, it would be likely to create a political disaster to rival the economic disaster caused by the euro – and for the same reason. Forced and artificial convergence cannot withstand the stress test of reality. Rather than store that debacle up for the future, it is important that the national leaders of the 28 member states of the EU take a stand now.Unlike the relative unknowns that populate the parliament in Brussels the national leaders are well-known at home, so have a genuine democratic mandate. That should give them the courage to face down the pretensions of the parliament and its standard-bearer, Mr Juncker, and choose their own candidate for commission president. Any such decision would, in turn, be likely to provoke months of confrontation between the parliament and national leaders in the European Council, and a stalemate over the commission presidency. So be it. In the interests of democracy, it is important to have that confrontation now.

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.